The Impact of UK Authorities on Crypto Companies: Coinbase and Revolut

The Impact of UK Authorities on Crypto Companies: Coinbase and Revolut

Coinbase, a well-known crypto company, faced a hefty fine of £3.5 million due to Anti-Money Laundering breaches by its subsidiary CB Payments Limited (CBPL). Despite an initial fine of £5 million, a settlement discount resulted in a reduced penalty. The Financial Conduct Authority (FCA) highlighted that the violations were related to CBPL’s failure to follow the regulatory guidelines set by the authority.

In October 2020, CBPL agreed to strengthen its financial crime control policies after a regulatory inspection. However, the FCA discovered that CBPL continued to onboard and serve 13,416 high-risk customers, contrary to the agreement. Shockingly, these customers deposited nearly $24.9 million on the platform, which was then used for crypto transactions totaling $226 million on other Coinbase platforms. As a result, the FCA concluded that CBPL did not adhere to the recommended controls, putting the firm at risk of facilitating financial crimes.

On the contrary, Revolut, another prominent crypto company, received a restricted banking license from the UK’s Prudential Regulation Authority (PRA) on July 25. This milestone came after more than three years of waiting since Revolut’s initial application in 2021, placing the firm in the mobilization stage. Francesca Carlesi, UK CEO of Revolut, expressed the company’s commitment to offering products and services that enhance the financial lives of its users.

Revolut has been a key player in the crypto industry, as evident from the launch of Revolut X, a standalone crypto exchange targeted at retail customers in May. The company’s innovative approach to banking and its focus on cryptocurrency services have distinguished it as a challenger bank striving to revolutionize the financial sector. With the recent banking license approval, Revolut is poised to further expand its offerings and solidify its presence in the market.

The contrasting outcomes experienced by Coinbase and Revolut underscore the importance of regulatory compliance and adherence to anti-money laundering guidelines in the crypto sector. While Coinbase faced a significant penalty for its regulatory failures, Revolut’s successful acquisition of a banking license signifies its commitment to regulatory standards and its determination to innovate in the financial services industry. As the crypto landscape continues to evolve, companies must prioritize regulatory compliance to ensure sustained growth and credibility in the eyes of authorities and users alike.

Regulation

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